HANOVER, Germany (Nov. 16, 2016) — Continental A.G. suffered double-digit drops in operating income for the quarter and nine months ended Sept. 30, in large part due to warranty cases and antitrust proceedings related to the firm's automotive divisions.
Conti's tire business, by contrast, reported just a slight drop (1.5 percent) in pre-tax operating earnings for the quarter and showed a gain of 5.4 percent for the nine months.
For the quarter, Conti's corporate operating income fell 42.4 percent to $662.6 million on 3.8-percent higher sales of $11.1 billion. The operating ratio fell four points to 6 percent.
For the nine-month period, operating income fell 10 percent to $3.21 billion on 2.8-percent higher sales of $33.4 billion, which yields an operating ratio of 9.6 percent, down about one point from a year earlier.
The tire division — accounts for 26 percent of Conti's overall business — reported operating income for the quarter of $731.1 million on 2-percent higher sales of $3 billion, for a 24.3-percent operating ratio.
For the nine months, operating income was up to $2.32 billion on 2.5-percent better sales of $8.79 billion.
Conti did not give a forecast for the tire business but said the outlook for the Rubber Group — which includes the ContiTech industrial rubber businesses — was for an operating margin of more than 17 percent on sales of $17.8 billion.
For the full year, Conti expects $167 million of positive effect from lower raw materials costs, including an estimate of $1.40/kilogram for the average price of natural rubber (TSR 20) for 2016.
In the Tire division, production capacity was expanded in Europe, North America and Asia.